23 December 2010

For my last column of the year, I thought I’d start with the obligatory round up of 2010!

It’s been another year of highs and lows, with many businesses struggling to survive and some major players leaving the market. The beginning of 2010 saw mortgage rates rise, despite a low Bank of England Base Rate (BBR). Yet, a reversal in the second half of the year saw lender rates drop as they chased volume business. Abbey, Bradford & Bingley, Alliance & Leicester, etc re-branded and become Santander. Metro Bank was the first new high street Bank launch in 100 years! A coalition government now steers us on the road to recovery (!) and the Financial Services Authority is to be disbanded. In reality, it is a name change (Consumer Protection and Markets Authority) with a new owner and location (BofE)! I won’t mention the world cup! And, despite consistent ‘mortgage approvals in decline’ stories, there has been increased mortgage activity and lender appetite in recent months.

So what for 2011? There are predicted signs of growth with total mortgage lending estimated to be approaching £140bn, compared to the £136bn estimated for 2010. Tesco Bank are due to launch. House prices are predicted to dip slightly. Who can guess what will happen to BBR although, at a recent conference, a well respected commentator suggested that BBR would not move until 2012 at the earliest. Another major question revolves around interest only mortgages, with many lenders removing this option at certain levels, are its days numbered? Don’t forget the VAT increase due in January. The repayment by Banks of the Specialist Liquidity Scheme, a mere £200bn+, is due towards the end of 2011 and early 2012. We expect to see this as a lender priority late into the year.

So, the reality is another year of highs, lows and a small mix of uncertainty for us all. Let’s also hope someone rushes to help first time buyers…

Thank you for reading my column throughout 2010. It has been a hard task trying to deliver a positive spin in a negative market. There are no plus points for ignoring the truth! Please let me know if there are any specific issues/areas you would like me to cover in coming months. You can email me at dale.jannels@atomltd.co.uk, or call me on the above number.

The directors and staff at AToM wish you, your family and friends a very Merry Christmas and a relaxing New Year. We look forward to being of assistance to you during 2011.

17 December 2010

A time for giving, a time for receiving and a time to keep a close eye on your finances! I know, boring and Bah Humbug! However, a little bit of your time, and sifting through old paperwork over the Festive period, could save you money in the New Year!

It always surprises me how few people actually know what rate they are on, the type of mortgage, i.e., fixed rate, tracker rate, etc, and whether they are paying interest only, or capital repayment. Unsurprisingly, almost everyone knows what it costs per month to the nearest penny! They will haggle for a £10 discount on a new washing machine whilst letting ‘sleeping dogs lay’ when it comes to their mortgage!

It’s very easy when the promotional rate period comes to an end to keep your mortgage with the same lender, ‘brush it under the carpet’, and deal with it ‘tomorrow’. But, we all know tomorrow never comes. A review of what’s on offer from other Lenders could give you a nice start for 2011, especially if you’re currently on a Standard Variable Rate, or equivalent.

Many Lenders are offering superb remortgage opportunities with minimal costs to change, including free standard valuations and legal costs. Rates are competitively low and mortgage product choice is at it’s highest for some time.

With the Festivities just around the corner, there really is no better time to think about finances. Available credit is in somewhat short supply and the price people will be prepared to spend on Christmas this year may well receive much more thought than in previous times.

It could go two ways - firstly, people could put their cares to one side, forget the 2010 trials and tribulations and flex the credit cards with any spends being forgotten until later. Or secondly, the purse strings will be drawn and funds will be tightly managed.

The important thing is to remember to only spend what you can afford and, if you are a mortgage holder, look to see what savings you can make (it could be hundreds per month) to prepare for a better year in 2011.

10 December 2010

The end of the year is turning out to be quite a positive affair! AToM towers enjoyed a stunning October superseded by a better November for new business applications, as consumers reviewed their finances and looked to secure deals in time for the Christmas break. Many wanting to fix their mortgage payments for 2011, and beyond. Surprisingly, new purchase applications nearly matched the remortgages in number. Although the actual volume of loan amounts decreased by nearly £2m!

For the employed consumer, mortgages are relatively easy to come by. For the self employed, where net profits, drawings and dividends have been generally low over the last 24 months, it’s becoming slightly more difficult, despite the number of mortgage products being on the increase. There are many alternatives than can assist in these types of scenarios. Some lenders will look at adding additional properties as security for mortgage purposes; others will look at investing two or three years upfront mortgage payments as additional comfort for the lender where income is not necessarily easily provable. Whatever the scenario, and no matter how complex, there may well be a lender willing to assist.

Finally, the FSA (Financial Services Authority) has deferred implementing its approved persons' regime until 2012/13. As part of the Mortgage Market Review (MMR), the FSA announced that it would be extending the approved persons’ regime to include anyone who advises on or sells mortgages (mortgage advisers/brokers and Bank staff). The FSA says it remains committed to making these changes to the approved persons’ regime, but as part of its ongoing reprioritisation of work, it is deferring introduction of the changes from 2010/11 to 2012/13.

The MMR may be a controversial proposition, but the approved persons regime is one which most people agree could genuinely benefit the consumer and will be a positive step towards a better industry. The cynics question might be to ask, who’s not ready for these changes? The FSA internally, or the Banks in being able to train their staff in time?

03 December 2010

The official line from the Bank of England is that mortgage approvals declined for the sixth month in a row. A reduction of` 0.4% in October compared to September. However, despite these headlines, nearly 100,000 people were approved for a mortgage and total lending amounted to over £11bn! We still appear to be trying to relate to 2007 figures (£30bn+ per month) and it is unlikely that we will be at that level again for some years yet. We really should be thankful that financial institutions are lending at all!

In comparison, as predicted in an earlier column, mortgage products are rapidly on the increase as we move towards the year end. Moneyfacts report that the number of mortgage products now available to borrowers has grown significantly, with mortgages at 80% LTV, or more, seeing the biggest improvements. At the same time rates continue to fall, with the average two, three and five-year fixed rates all standing at the lowest level seen since records began. At AToM HQ, we’ve seen an increased number of consumers switching from current deals to secure a low long term fixed rate. Some are even opting for a short term low rate tracker. Many lenders are offering free valuations and free legals on remortgages, so the cost of change can be minimal. Some lenders have even re-launched exclusive products via certain mortgage distributors in order to attract new business before the year end. These products tend not to be available on the high street, and a review with an independent mortgage advisor could be time well spent.

Finally, no one really knows what is going to happen to house prices month on month in the current climate, but two separate sources have predicted what they think 2011 will bring. Hometrack, an online automated property valuations company, suggest that house prices will drop by 2% whilst a fall of 3.1% is predicted by the Office of Budget Responsibility, an independent assessment body. Although these are only predictions, and are subject to change, the underlying message appears to be consistent for next year…

26 November 2010

With reports of snow on the horizon and rising energy prices hitting the press recently, uSwitch estimate that 61% of households are worried about the cost of their energy bills this coming winter.

According to creditaction, more than four in ten adults in Britain struggle each month to make it to ‘payday’. And 41% of consumers feel worse off now, than they did this time last year, according to Gocompare.com

In terms of payment difficulties, the UK Payments Council suggest there are more credit cards in circulation in the UK than people and the average rate of interest is currently around 18.86%, which is 18.36% above the current Bank of England Base Rate! uSwitch estimate that 14 million consumers now use credit cards for day to day spending, whilst confused.com estimate that 26% of credit card holders have been charged at least once in the last year for missing a minimum payment.

If credit cards or other unsecured payments are late or missed, your credit report will be affected and only a limited number of lenders will look to assist when applying for a mortgage, but at a premium interest rate. This extends to insurance and mobile phone providers. You may not even know a default has been registered against you, until you apply for further products.

178,200 mortgages ended Q2 2010 with arrears equivalent to at least 2.5% of the outstanding mortgage balance and 9,400 properties were taken into possession, according to the Council of Mortgage Lenders. The equivalent of 1 property being repossessed every 14 minutes. In comparison, the US amassed a record 102,134 repossessions in September alone.

These are stark figures indeed, but the reality is, if you miss one mortgage payment, or secured loan payment in the last 6 months, your chances of getting a new mortgage are almost zero.

I make no apologies for showing the stark figures above as we move in to the Christmas period. Credit is very easy to obtain, but a) you need to pay it back and b) if you get it wrong, it could affect any future financial applications for a considerable period of time.

19 November 2010

The remortgage market is on the increase! Customers are taking heed of the low mortgage rates currently available and are reviewing their finances in the run up to Christmas and in preparation for 2011. Many lenders are offering free valuations and free legal costs (using the lenders solicitors) in order to attract new customers. However, the conundrum on whether to take out a fixed rate mortgage continues. With more pundits predicting that the Bank of England Base Rate (BBR) will remain relatively static throughout 2011, one could say a short term mortgage product that tracks the BBR is attractive. At the same time, a fixed rate could be more beneficial over the medium to long term when, it is estimated, the BBR will increase.

So, to cater for both, some lenders have launched a ‘switch and fix’ option, offering the best of both worlds. The products tend to track the BBR over a period of two or three years. Within this period, you have the option to switch to one of their fixed rates (at any time after 3 months) with minimal costs to pay. A clever and innovative way to attract new business! Although, if this is of interest, you need to accept that you will only have the option of the fixed rates available at the time from that lender, and they may be substantially higher at the time of switching, than those on offer today. If only we had a crystal ball…!

The other thing to think about when taking out a new mortgage is the reversion rate of that product (the rate at which the mortgage reverts to, once the incentive fixed, discounted, tracker rate period expires). Some lenders tend to revert to a tracker rate at an amount above BBR. Others revert to their own Standard Variable Rate (SVR), and even in the current climate, they can be high (5.99% +). Always do your homework and make sure you understand all the elements of your mortgage before signing on the dotted line. Ensure that you have no cause for regret later.

12 November 2010

With Bank Base Rate held for the 20th month at a record low of 0.50%, the question on everyone’s lips continues to be, when it will it rise? We all believe it will, but have no idea when. Many pundits are suggesting that the BBR will now stay low for at least 12 months. However, a few, believe it will rise much sooner and even one of the Monetary Policy Committee has pushed consistently for a raise over the last few months, although they were out-voted by other members. So, the real conundrum in the run up to Christmas and New Year remains…to fix or not to fix?

We are seeing some really competitive rates being offered and some lenders are even providing market leading products with minimal costs for a mere number of days – fire sales! Two lenders recently launched fantastic products only available for a period of 8 days! This causes mayhem and pandemonium within the industry as intermediaries race to submit customer’s applications in time to meet the deadlines and secure these rates.

The BBR being held is good news for anyone with a mortgage on a base rate tracker or discounted rate facility. Bad news for savers though and particularly those who geared their investments and savings to provide for them in retirement. It is hard to know how this can be overcome as the only route for better savings income is higher rates. It is a Catch 22 situation!

This week sees the great and the mighty of the mortgage industry meeting together at Olympia 2 for Mortgage Business Expo 2010. This two day event consists of lenders and ancillary businesses showing their wares and seeking to establish increased business relationships and volumes. The Financial Services Authority will be there and they will be presenting their report on the forthcoming Mortgage Market Review. This is their latest initiative designed to provide the consumer with yet greater protection and more qualified advice and choice. I suspect that the presentation will be 'lively' as not all in the profession, particularly those who are set in their ways, are happy with the changes proposed. Watch this space!

05 November 2010

Each week in this column I attempt to explain what happens behind the scenes in the world of mortgages and try to keep you, the consumer, updated on information that is not readily available to the general public. At the same time, trying to keep the detail clear, concise and, where I can, positive! Although the latter has been very difficult of late!

As you know, the mortgage market is heavily regulated by the Financial Services Authority (FSA). But even I find it difficult at times to understand the breadth and depth of legislative requirements which are becoming an everyday way of life in the mortgage and financial services sector.

I am an unashamed supporter of consumer protection, but now, it seems, Brussels are to get in on the act and are looking to issue regulatory impositions which will steamroller the FSA. One of its stated initiatives is to insist on a ten day cooling off period on all mortgage business. This is fraught with potential problems, not the least of which being the additional time added to an already lengthy house buying process.

Our own regulator has issued such strict rules and restrictions that mortgage lenders are already constrained on what they can and cannot do and this is being felt in every area of mortgage lending. Impositions on mortgage types such as interest only, lending into retirement, self employed and (thankfully) self-certification have already had a major impact. The thought of further restrictive regulation is frightening! Watch this space..

On a more encouraging note, October was a fantastic month for new business for AToM. Not since July 2009 have we seen those levels of new business. We have also seen a new mortgage lender come to market. Portal Portfolio is to provide secured second charge mortgages specifically to people with pension portfolios. AToM is the sole launch distributor for this lender. And Precise Mortgages have recently launched in to the Residential mortgage sector, having previously been in the Buy to Let arena. Both lenders have their own niches and I will explain more in the coming weeks. Suffice to say though that their launches have given the sector a much needed boost.

29 October 2010

Political and economic commentators seem to be divergent over the outcome of the recent Spending Review, though it is likely to be some time before its full impact reaches the high street. The doomsayers predict that much damage to confidence may have already been done, psychologically at least! I prefer to look at a more positive outcome. If the overall reduction was intended to be 8% that leaves 92% still to spend! It seems more sensible to major on that number now and discuss how best to use it to the benefit of the country as a whole.

There may well be some pain to come but, as the saying goes, no pain, no gain and we cannot ignore the financial mess that the country is in. So far, investment markets have not meandered much suggesting that the details of the review have been well received, in principle anyway! The current base rate structure is good for those with mortgages on base rate trackers, but it is not so good for savers or pensioners who look to higher rates to boost their income. I have regularly encouraged readers to be ahead of the mortgage rate game and, putting my reputation on the line, I am leaning towards a rate rise sooner than many pundits predict.

One area of the mortgage market which continues to gain momentum is Equity Release. Put simply, this is a scheme through which the asset rich can release funds from the equity in their property. This scheme normally applies to applicants approaching the twilight of their life although it is not uncommon for the newly retired to participate. Equity Release is highly regulated to ensure no high pressure selling and we always encourage offspring involvement. After all, the equity is likely to form a major part of their inheritance and they should always have the opportunity of finding alternative methods of funding their parent’s lifestyle first.

Another rapidly growing mortgage arena is in Buy to Let and lenders are introducing more competitive products almost daily. As problems for first time buyers continue, the Buy to Let area is wide open for investors, especially as rental incomes become increasingly attractive. Whatever your interest, talk to an independent mortgage advisor.

22 October 2010

Just think, in two months time, we’ll be winding down for Christmas! So I thought I’d get in quick as most of the shops already have decorations to hand and even some of the advertisements on TV are now Christmas orientated! I think most would agree that this year was a year of hope and expectation that we’d see some light at the end of the tunnel. But unfortunately it has remained lacklustre despite all the effort and I for one will certainly look forward to closing the door on it !

However, as we enter the final months of the year, we are starting to see positive movement from some lenders as they relax their strict underwriting criteria and are lending slightly more. One lender this week, on a conference call, asked us if we could help them double their business volumes. There is an appetite to lend, hoorah! I suspect others will make a last ditch attempt to end the year on a high by offering lower rates to attract decent volumes of business in order to hit targets. Watch this space!

Finally, can you believe it’s nearly three years since the first public signs of a credit crunch/major recession were emerging? Northern Rock was the first real public player to go in to financial difficulties in late 2007, with many others following thereafter (many had already vanished from the radar prior to public awareness!).

Long term rates, in 2007, were considerably higher than where they are now. If you are on a long term fixed rate, in excess of 5%, then it may just be worth having a review to see if remortgaging now could save you money. With many lenders offering low rates and some offering fee free remortgage deals, there’s no harm in reviewing your current mortgage product to see if money can be saved. Even if you are to incur redemption penalties to change lenders, a new mortgage could still work out financially beneficial. Speak to your local independent mortgage advisers to find out more. It could be a very worthwhile conversation in the run up to Christmas and looking to the future!

15 October 2010

A report from the Halifax has suggested that house prices dropped in September by a huge 3.6%. According to the lender, the average price of a home in the UK is now £162,096. The fall equates to an average drop in price of £6,000.

Despite this disappointing, but unsurprising report, one National Mortgage Brokerage reported that mortgage applications were up 14% in September and numerous lenders have recently reduced rates, including the Coventry who reduced some products by up to 0.9%.

The Royal Institute of Chartered Surveyors (RICS) also reported an influx of new valuation instructions in September. RICS say this was due to homeowners testing the market ahead of further public spending cuts, or trying to sell before a possible deterioration in the economy.

Readers will appreciate that we regularly meet with all types of clients and endeavour to find the right mortgage for their particular needs. We are amazed how often clients advise us of the fantastic offerings which are apparently available according to 'a mate in the pub'. A story we recently heard about was the client who was selling and buying and who was advised by their 'friend' not to make the last two or three mortgage payments. Allegedly, it didn’t matter because they were leaving that lender anyway! Very worrying, totally incorrect and certain to place a big black mark on their credit file and stop any chance of getting a new mortgage!

Another recent instance included a client who was advised to surrender their life and savings plan early, when it was within touching distance of maturity. This has lost them the opportunity of a potential maturity bonus, the continuation of life cover and, in our view, there may have been other and better ways of making use of their plan when their full circumstances were known.

Qualified advisors have to stand behind the advice they give. Will you be able to sue your 'bar room adviser’ if the advice they give turns out to be faulty! I doubt it, so play safe and only listen to the professionals who have the qualifications to back up their advice and recommendation which will only be made after a full and thorough examination of your circumstances.

08 October 2010

A worrying report was recently released by First Direct, the online lender of the HSBC group. Following a survey of 2,000 customers, 92% of those planning on taking out a mortgage during the course of the next year don't understand the difference between the types of deal on offer. Only 26% of existing mortgage borrowers said they completely understood how the main types of mortgages work and, on average, only 22% completely grasped the difference between fixed rates, variable deals and tracker mortgages. The research also concluded that men are more likely to appreciate the difference between types of mortgage than women, at 26% compared to 18%. In short, the cynic in me would suggest that this shows the severe lack of advice taken and understanding provided for customers who buy mortgages online, or from a source only offering their own brand products.

Confidence amongst homeowners about the outlook for the property market has fallen sharply amid growing concerns over the availability of mortgage finance, say Zoopla.co.uk. According to the survey of 6,149 homeowners, the average growth predicted for house prices in the next six months has also dropped to only 3% from 5.5% three months ago. And the number of respondents who expect property prices to fall over the coming six months is up sharply to 1 in 4 (25%) from 1 in 10 (11%) only three months ago.

According to creditaction, at the end of June, there were 1.25 million buy to let mortgages outstanding, accounting for 12% of all mortgages, the highest proportion since records began. In addition, the lettings market remains buoyant, reports the latest RICS Residential Lettings survey, due to increased tenant demand and a shortage of properties pushing rents higher.

First Time Buyers accounted for 52,200 mortgages between April to June, up from 43,400 from January to March, according to the Council of Mortgage Lenders. The typical first time buyer deposit in July was 24% (£39k). The average loan was £123,711 and the average first time buyer borrowed 3.14 times their income.

01 October 2010

Good news this week! One lender who stepped back from new business lending back in February 2008 is lending again. Paragon Mortgages were renowned specialists in the buy to let arena with professional landlords, houses of multiple occupancy and properties in limited company names. Their re-emergence in the market is positive news, especially for landlords with an established portfolio of properties. Paragon offer a non credit scoring approach to prudent lending, design their products to attract experienced landlords and, even better news, they are initially launching through a limited panel of distributors including AToM.

In the residential market, remortgage applications appear to be on the increase. Borrowers tend to be looking to secure long term fixed rates. Others are releasing equity to acquire Buy to Let properties in the current cheaper climate or releasing funds to help siblings step on to the increasingly tough property ladder. Whatever the reason, make sure you do your homework. As we move in to the final quarter of the year, some lenders will be looking to end the year on a high and attract volume business. There are some great rates available to cater for all requirements, whether you require a fixed rate, tracker/discounted, or a capped rate, etc.

I’ve said this before, but it needs constant review. If you have plans to apply for a mortgage in the not too distant future, keep your eye on your credit. Don’t miss or make late payments to any provider. All financial institutions will base their decision initially on your credit history. If you have missed or late payments, or even a lot of recent searches (from multiple finance/mobile/car/home insurance applications), this could be detrimental to your ability to obtain finance, at a competitive rate. If you have not reviewed your credit search before, get it for free (30day trial period) from Credit Expert (see www.atomltd.co.uk for a link). It’s well worth a review and a good insight on how attractive you may, or may not, look to a lender.

24 September 2010

The Council of Mortgage Lenders has reported that gross mortgage lending reduced by 14%, to £11.4bn, for August. This is the lowest August lending figure since 2000 reducing from £13.3bn in July. Further signs that restrictive lending is rapidly becoming the norm!

The buoyant Buy to Let market has been dealt a blow this week as Lloyds Banking Group (LBG) have restricted the number of Buy to Let mortgages a single applicant can have within the group to just 3 properties with a maximum lending of £2m. This is a reduction from 9 properties and £3m previously. Portfolio owners within the group, which includes Halifax, C&G, BM Solutions, Bank of Scotland and Lloyds TSB, are now restricted to the 3 properties rule and have to look elsewhere to increase their portfolio. This move puts further pressure on the few remaining lenders offering Buy to Let mortgages and some of these are already creaking with the pressure of increased business, announcing delays of up to 20 working days.

The Bank of England has issued its justification as to why lenders have not passed on the full benefit of low interest rates to consumers. In its quarterly bulletin, the Bank indicates that some new lending rates have actually risen whilst base rate has fallen! They blame this on lenders seeking to build larger financial reserves, funding costs and credit risk balances, among other things. The report says lenders are seeking to rebuild net interest margins achieved, in part, through higher mark-ups on new lending. Perhaps one word could more easily describe these. Profit! We have seen billions of profits reported for the half year from many lending institutions so perhaps it is fair to question if this is now greed? Someone needs to get tough! The question is, if the Bank of England is happy to stand behind banks making extortionate profit: if the FSA are now to be part of the Bank and the Government has taken a side step, is there anyone left to champion the consumers cause? No doubt we will see the bankers refusing their Christmas bonuses this time in order to help the cause..

17 September 2010

A lot of people ask me “how do you know what to write each week, it must be difficult?” But actually, there’s so much going on, I could easily fill more than my 350 word column consistently. Despite all the recent negative press, the mortgage market is vibrant with activity!

The bottom line is that a mortgage is the biggest debt you’re likely to ever take on, so you need to do your homework and understand more than just what the national press decide to publish about the Bank of England base rate being held at 0.5% again, or how much profit the banks are currently making!

Advice is crucial and ideally from a company who can offer ‘whole of market’ mortgages, not just products from a limited panel of lenders, like some Estate Agency chains or a Bank/Building Society who only offer their own products.

Most lenders have a set of rules and criteria that need to be met even before requesting a decision in principal (stage at which you are credit searched for pre approval). For example, one lender has a debt utilisation rule at 70%. So, if you had a credit card with a £1k limit and you had a balance of £701, divide the latter by the previous and your utilisation amounts to 70.1%, which means you would be ineligible for this lender. Another stipulates you can have no more than 8 unsecured credit cards or loans at the point of application. We tend to see customers have a number of debts within this ruling, but keep open old debts with zero balances, which push them over the stipulations. Others won’t look at unencumbered properties for remortgages, or assist where the customer sold their house within the last year and are renting, so falling between a first time buyer and a residential home owner and so on.

All of these are little idiosyncrasies that should be known by anyone advising on a mortgage. These save time and probably unnecessary credit searches being carried out. Remember, the more credit searches you have against your name, the more likely your credit score will decrease, which may affect your ability to obtain finance. Whoever you talk to about your financial requirements, make sure you say at the outset that you do not want to be credit searched, unless you give them the authority to do so.

10 September 2010

The Bank of China this week has increased the amount they will lend compared to the property value. Residential mortgages are now offered to 80% Loan to Value (LTV), Buy to Lets up to 75% LTV and Commercial mortgages up to 70% LTV. Positive moves from a lender who distribute their mortgage products through their branch network and only five other distributors in the UK, of which AToM are one. They will also consider First Time Buyers, Home Movers and Remortgage applications. Unlike some other lenders, Bank of China will also look at flats above shops, houses of multi occupancy, new build properties and freehold flats. Some (good) potentially useful niches. We find them incredibly helpful to deal with and they have some very competitive rates.

The Nationwide House Price Index has suggested that house prices dropped by 0.9% in August, with the average house price now at £166,500. This is the second month in a row Nationwide have reported a house price decrease. Let’s hope this is not the start of a trend and stabilises shortly; although it is probable that the lower level of activity over the summer is reflected in these reported figures.

The number of mortgage products appear to be on the increase. New products being launched in August far exceeded the same period last year according to one of the industries leading sourcing systems, Mortgage Brain. In August 2009, just 5 new mortgage products were launched, however in August 2010, some 1,500 products were launched. This is good news and despite some products being withdrawn and re-launched with revised rates, 350 products were completely new. Fixed rate product offerings increased by 31%, whereas Tracker products decreased by 5%. The system also reports the total number of products available to the mortgage market now stands at around 7,600!

Is the appetite for mortgage lending beginning to reappear? Despite the inevitable doldrums reported by the national press, we’re hearing some great rumours that lenders will make a big push to lend in the last quarter of this year. Fingers crossed!

04 September 2010

The kids are back to school, the holidays are over and you may (or may not) be looking forward to peace and quiet and having some time on your hands. However, as the final few months of the year race towards us, maybe it’s time to start thinking about 2011 and what trials and tribulation this may bring. Without doubt, the only certainty in the current financial markets is uncertainty. When will bank base rate rise? Who really knows what is happening with house prices? Will 2011 lending become further restricted as the banks scrape and save(!)to pay back the £300bn lent to them via the Special Liquidity Scheme? All of these lean towards ensuring you review your current financial arrangements and ensuring you are on the best deal to see you through the medium to long term. Whether you require the security of fixing your payments for an amount of time, or whether you are a bit of a risk taker and might look at a short to a medium term tracker or discounted option, right now, both are available at attractive rates in the mortgage market. A quick review with an independent mortgage advisor who has access to the whole of market mortgage rates could be time very well spent.

On the other hand, we’re also seeing a vast increase in those purchasing a property for investment purposes. The Buy to Let market is rapidly increasing again as people turn to renting rather than purchasing in the current climate. Mainly due to their ineligibility to obtain a mortgage for whatever reason. Investors see this as a great opportunity to increase their investment property portfolios and taking advantage of the great rates in the market. Be advised though, if this is something of interest, lenders tend to charge large arrangement fees for setting up the Buy to Let mortgage and you may be eventually be subject to Capital Gains Tax at a later date, on any profit made on disposal of the property.

27/8/10 - Dale is away on holiday this week so it has fallen to 'the old man' to scribe and comment on the market. So here goes........

All of the mainstream lenders tend to use a system of credit scoring when deciding if they want to lend to new applicants and even the smallest of 'blips' can cause a lender to decline even best cases. It is crucial that you make all payments to any provider on time. Be it mobile phone, utility provider or lender. They are all prone to putting a black mark on your credit file if you are just a few days late. Some will do so even if you are one day late. So be vigilant, as any such misdemeanour can affect your credit rating. Whilst on this subject, we suggest to clients that they consider subscribing to one of the credit report providers such as Credit Expert or Equifax. Why? Well, a good friend recently applied to a bank to support his son as guarantor. The bank declined my friend who was certain that he had a pristine credit rating. Upon examination, it was found that someone had cloned a credit card and was using credit in his name but not paying back! We managed to resolve this, eventually, but it was a sobering exercise.

Some financial commentators are again talking about a double dip recession. Is this going to happen and if it does, where will it leave the financial services market? There is no doubt that much of the recession was exacerbated by well known TV pundits who seemed to delight in the fame that it brought them. My take on this is that confidence breeds confidence so lets hope that this time we see presenters talking the market up.

The Buy to Let market is enjoying resurgence. Landlords have more tenant applicants than houses available. Of course, this is geographically spread with some areas faring better than others. In turn, first time buyers are still finding it difficult to get on the ladder and parental support is more necessary than ever before.

20/8/10 - Despite being in the midst of the holiday season, there is certainly a lot of mortgage activity happening! AToM have seen a huge increase in enquiries for re-mortgages as customers look to refinance existing deals on to better rates or raise capital to purchase other properties or for home improvements. There’s no better time to review the market as there are some competitive rates currently available. Especially fixed rates which cater for those looking to stabilise their monthly mortgage payments for a specified term. We have recently been allocated a tranch of fixed rate funds at 3.99% for 3 years (5.2% APR) by one lender. This includes free standard legal costs on re-mortgages, or £250 cash back on purchases with no early redemption charges payable after the fixed rate term. This product is available up to 80% of the property value. Terms and conditions apply and please feel free to request full details from us.

We have also seen a vast increase in customers looking to consolidate debt or even look at debt management plans. Both can sometimes cause issues. If you consolidate unsecured credit in to your mortgage, although your monthly payments may be lower, you may be paying more for your debt over a longer term. And with debt management plans, or Individual Voluntary Arrangements(IVA), etc, again, the lower monthly payments may help in the short term, but you may well find it hard to gain an approval from a lender to refinance at a later date. Lenders tend to shy away from debt management plans and may not touch anyone who has been in an IVA unless it has been discharged for more than four years. Advice should always be sort before entering in to these types of arrangements.

At AToM, we are independent and we will happily go through the pros and cons of changing any of your financial details before proceeding to conduct any credit searches or decision in principles. You need to be clear that it’s the right deal for you. If your current deal is still the best option for you, we will suggest you stay where you are.

Whatever you do remember to check what terms and conditions apply and also remember that your home may be repossessed if you do not keep up repayments on your mortgage.

13 August 2010

First Time Buyers have taken another battering this week as the Coventry Building Society scrapped the option for interest only mortgages for those getting on to the property ladder for the first time. Any First Time Buyer applying for a mortgage with this lender will now only be offered a repayment mortgage. This follows recent moves and changes of criteria for Interest Only mortgages from various lenders including Northern Rock and Lloyds Banking Group in reaction to the FSA’s Mortgage Market Review which includes commentary on this subject. I don’t think the days are numbered for this type of mortgage, however we are seeing many lenders urging and some would say ‘pushing’ customers to a repayment option from day one.

Despite the restrictive lending nature of the mortgage market over the past year or so, lenders are still reporting massive profits for their half year. £1.1bn here and £3.95bn there, the list goes on. Although I’m sure the profits would have been more, had some of the excessive bonuses not been paid. Although unknown currently, I’m sure we won’t be surprised to learn these will be in very high numbers too! Just think, if these vast numbers had been reinvested in to actual lending figures, I may not have anything to whinge about!

Finally, the confusion over house prices continues. The Royal Institute of Chartered Surveyors (RICS) reported that house prices dipped in July. RICS says difficulty in securing mortgages and increased uncertainty about the prospects for the economy may have contributed to caution from potential home buyers. Nationwide also reported a 0.5% fall in average property prices in July, the first drop in five monthsHowever, Halifax disagrees in that their House Price index suggests that prices increased by 0.6% which was an upturn on the decrease reported in June. With such differing figures from various respected sources, it’s no wonder that the whole house buying process remains confusing for one and all, discouraging some from wanting to rush to market.

06 August 2010

Lenders seem to have been the focus of my articles more recently and in more of a positive light! Having had lengthy talks with many lenders over the last few weeks, I believe we will see more aggressive products in the coming months as lenders aim to finish the year on a high and with volume business. Fingers crossed and watch this space!

We’ve seen a huge increase in foreign mortgage applications over the last 10 days or so with people purchasing abroad, some for residential purposes, but in the main for investment or as a holiday home. As we emerge from a global recession, many countries have been hit just as hard as the UK has, if not more. We recently had an enquiry from an individual purchasing a residential property in Spain. They were re-mortgaging their UK property to raise the deposit and were letting this out. The real eye opener was that the Spanish appear to be very proactive for house sales and the Spanish lender offered an 80% loan to value and gave them the first 3 years interest free! Scary!

Back in the UK, there have been positive movements by some specialist lenders. Although not necessarily household names, most of them have large parents. Such an example is a company called igroup (owned by GE) who have recently increased their loan to value from 75% to 80% on some products. They have some superb rates of interest and an appetite to lend. They will also allow first time buyers but will only deal with the employed. However, they will take a view on any historic minor financial problems and price to risk accordingly.

And, finally…I’m delighted to announce that AToM have picked up our fourth major industry award of 2010! We were thrilled to be awarded a British Mortgage Award at a recent event held in the London Hilton, Park Lane. Attended by over 500 mortgage professionals, AToM came top of the class in the Specialist Mortgage Distribution category and the award was presented by Sir Geoff Hurst MBE. This is a great accolade and testament to the great team we have here at AToM.

30 July 2010

The debate on where mortgage interest rates are going took another stumble this week. For many months, various economists had predicted that the Bank of England base rate would rise towards the end of 2010 with further rises throughout 2011. However, Ernst & Young have suggested that if the impending spending cuts come through, the BBR will remain at 0.5% until 2013! Another sign that although we all believe rates have to rise, no one really knows when this will occur.

With this in mind, AToM towers has seen a vast amount of people requesting long term fixed rates over the last 3 to 4 weeks. Uncertainty seems to be the only certainty in the market and, quite rightly in my opinion, people want the guarantee of a long fixed rate term on their mortgage so they can plan for the next few years in confidence. There are some great rates to be negotiated currently and some include free valuation and solicitor’s costs, so that re-mortgaging fees are kept to a minimum.

We’ve also seen lenders expanding their distribution. AToM was delighted to be appointed to the Bank of China distribution panel last week. We can now offer lifetime tracker rates for Residential, Buy to Let and Commercial properties. Bank of China have only been in this area of the market for a year and AToM is now one of only five distributors in the UK to offer their products, outside of their branches. Please contact us to find out more.

And finally, I’ve mentioned this before, but its back on the radar. Many dormant lenders are offering customers a discount of up to 30% off their mortgage to move lenders. If your current lender is one of these, then it’s worth a call to see if you qualify for a discount. Normally, they will give you a deadline in which to complete the transfer of your mortgage but I’m sure it’s a timescale that AToM could meet. Just think, up to a 30% reduction on your mortgage - it could be a financially beneficial telephone call!

23 July 2010

The final curtain appears to have been drawn on Self Certification and Fast-Track mortgages. With preparations in place to amalgamate the Financial Services Authority (FSA) into the Bank of England in 2012, the regulator is clearing up what it considers to be a few outstanding projects. The Mortgage Market Review papers were distributed late last year and the FSA has now launched its consultation papers, following feedback from various parties.

One major proposal is that all lenders will have to prove affordability on all loans. Therefore, every mortgage applicant will be required to provide accounts or payslips and possibly bank statements so that the lender can deem the loan affordable to the consumer. With the old Self Certification mortgages and on some current ‘Fast Track’ mortgages, proof of income was not necessarily required by the lender.

Other changes also include providing proof of affordability into retirement and on interest only loans (which will be assessed as though they were on a Repayment basis). House price inflation or downsizing to a smaller property will no longer be acceptable as a suitable repayment option.

These, and a myriad of others points, are now at the consultation process and are planned to be implemented later in the year.

The Council of Mortgage Lenders has reported a great month for new lending in June, some 15% up on May and a 7% increase on June 09. However, whilst the market remains delicate, the power appears to be turning from the sellers to those who can actually raise mortgage finance. Whilst market products remains constrained, this could be very much to the benefit of the buyer. Remember, take independent advice before agreeing to proceed on a mortgage.

And finally…it’s the end of an era as Mercury FM changes to Heart FM. I’d like to personally thank all of the staff at Mercury FM for delivering a great local radio station in recent years. They certainly assisted in growing AToM’s exposure in the local area. I wish them all the very best for the future.

16 July 2010

There has been much hype recently regarding Interest Only and Repayment mortgages. With an Interest Only mortgage, you only pay interest and no capital and so, at the end of your chosen term, you still owe the lender the same amount as when you began. Normally with this method, it is recommended that you contribute to a saving or investment vehicle to generate funds to repay the mortgage at the end of the term. However, this is usually optional.

With a Repayment Mortgage, you pay both interest and capital each month. Initially, this appears more expensive, but does mean that you pay back the loan with no debt outstanding at the end of the term assuming you meet the required payments on time.

Many lenders have recently tightened their requirements on Interest Only mortgages. Some will not allow this method above certain loan to value levels. Others charge higher interest rates and many are trying to persuade customers to switch from interest only to repayment.

Why the recent attention to these repayment options? Simply, because many borrowers have stepped onto the property ladder choose the cheaper option promising to review their payment plans at a later date. The problem is that the ‘later date’ never seems to arrive! As we all know, people generally live to their means. Many borrowers on this scheme have no savings or viable plans to pay back the debt and this is worrying!

That said, Interest Only mortgages can be right for certain professions - people entitled to annual bonuses: the fluctuating income of self employed: or employments where lump sums are received after a number of years in service.

This debate is gathering pace so expect to read more in coming months.

Finally, do you know the full details of your own mortgage? A recent Consumer Financial Education Body report suggests that 15% of mortgage holders are unaware of their current repayment style or interest rate! As this is the largest debt you are likely to take, it seems crazy not to understand it! We are quick to change mobile, broadband or utility provider the minute rates start to increase. This mentality should also be applied to mortgages. Always be on top of your mortgage. Otherwise it could cost you a small fortune.

12 July 2010

AToM can report a bumper month for new business in June. Our best month for mortgage applications and completions for over a year! Fantastic news which shows that, even in a dire market, consumers are turning to independent mortgage advisers for assistance for advice and support. Now, more than ever, independent advice is key. There are many mortgage options available, but finding the right one to suit your requirements can be difficult, especially as some lenders only offer their special mortgage products through a select panel of distributors, like AToM.

Despite such positive news, market conditions, and national debt statistics for June, from creditaction, do not paint a pretty picture. In brief:

- 107 properties were repossessed daily during Q1, 2010- 203 mortgage possession claims will be issued and 158 mortgage possession orders will be made today- 391 people are declared insolvent or bankrupt every day. Equivalent to 1 person every 51 seconds during the working day.- 1,000 people seek some form of formal debt rescheduling every working day.- 1,896 people were made redundant every day during the 3 months to end April 2010.- £131.5m is the interest the Government pays each day on the UK’s net debt of £903bn. Estimated to rise to £182m a day in 2015-16!- Shelter estimate that more than one million householders have used credit cards to pay their mortgage or rent in the last 12 months and moneysupermarket.com advises that almost 5m UK adults regularly use their credit card to pay household bills. Another 2.5m withdraw money using their cards!

Scary figures! The recent emergency budget is trying to tackle the scale of some of these and only time will tell if it succeeds.

In the meantime, remember that financial institutions evaluate your mortgage application based on your credit history. In fact, insurance companies will also credit search you before agreeing to cover you. Most will use either Experian or Equifax to review your financial status. In short, every financial outlay you have, or have had, will be reported. If you have too much credit, not enough credit, or missed payments on any credit or utilities (including Gas bills or Mobile phones), you may find that mortgage availability to you will be limited.

03 July 2010

The Bank of England has released figures reporting that 49,815 loan approvals for house purchases occurred in May, slightly lower than April’s figures and below the last six month average of 51,856.

May’s remortgage approvals were also lower than Aprils at 25,759, and below the six month average of 26,443.

Neither report is much of a surprise due to the uncertainty of the emergency budget held in early June and the limited availability of attractive long term mortgage products. I suspect Junes figures may be little better.

The Land Registry House Price Index has confirmed that house prices dropped by 0.2% from April to May this year despite an annual rise of 8.2%.The average property price in England and Wales is now £165,314 with all regions experiencing increases in their average property values over the last 12 months. London has had the biggest increase of 14.2% while the North East saw just 1.8%. The South East also had the biggest monthly rise at 0.9%. Great news for sellers, not so much for purchasers.

However, now that we know the full details and probable impact of the emergency budget, the pundits are predicting that we could see a bank base rate rise in the 3rd quarter of this year.

So, with rates relatively low and some longer term fixed rates being launched recently, now is probably a good time to review your current mortgage and see what options are available.

Most lenders want new customers, but are less likely to offer you attractive options to stay with them. This, in the main, is due to the different fees and charges that can be added to the new mortgage at the outset. In the current climate, the lenders bottom line tends to be more profitable with new clients, rather than old. So don’t feel loyal, if a better option is with another lender, then think of number one!However, we’re still stuck with the fact that many lenders do not want to lend in huge volumes. Therefore, you may find that actually getting a mortgage becomes the main obstacle and you may have to stay with your current lender anyway! Seek advice……

28 June 2010

The mortgage process when purchasing a property, first time buyer or home mover, will be roughly the same. The selling agent will seek to agree a number of deadlines including the arrangement of mortgage finance. At this point you should speak to an independent mortgage brokerage who will assess your overall financial position and mortgage requirements with you. They are required by law to give you an Initial Disclosure Document detailing who they are; who regulates them; their scope of permissions; whether they are restricted to a small lender panel or ‘whole of market’; any fees and costs involved including any for advice or consultation. This document also advises how to complain if you are unhappy (now or in the future) with the advice provided.

A good advisor will complete a financial fact find ensuring that they ‘know their client’. This is necessary before any ‘advice or recommendation’ can be provided. Be patient as this process can be lengthy. It is in your best interests however, ensuring that you receive the best possible advice designed to meet your personal mortgage needs and requirements.

Once you’ve agreed the best mortgage for you, a decision in principle (DIP) will be completed, usually on-line with the chosen lender. This involves brief personal details, income disclosure and a credit search. Be wary here as too many credit searches will have a negative effect on your credit score. Ensure that the product and lender are right for you before a DIP is conducted. Possibly choose one adviser to work with you right through the process!

DIP decisions are normally instantaneous. Assuming success, it is then upgraded to full application. Payment for valuation is made (sometimes free) and the valuer confirms to the lender if, in their opinion, the property is suitable security for mortgage purposes. A more detailed in-depth survey (homebuyers report) can be arranged at the same time, but for a slightly higher cost.

The chosen lender will require information on income, identity, proof of residency as part of their due diligence requirements. Assuming no issues arise, a mortgage offer should be issued. Then, subject to the solicitors conveyancing process, you are now on the road to completion and should soon pick up the keys to your new home!

18 June 2010

With less than a week to go before the new coalition emergency budget is announced pundits, all and sundry, are in full flow trying to predict what the Chancellor will implement to try and correct the country’s financial nightmare. The task ahead is not to be envied!

On the mortgage side, there are many potential issues on the horizon. Not least the fact that a certain small sum of around £300bn was advanced to a number of banks over the last 2 years and which is due to be repaid in the next two years or so. To put this in to perspective, circa £300bn was the total amount lent in the UK by financial institutions in 2007! With quantitative easing a distant memory, banks and financial institutions are working out ways to ensure their loans via the Special Liquidity Scheme are repaid within the deadlines. Could this mean we see further restrictive lending, on an already tight market, in order to meet these demands? In comparison to the 2007 figures, it is predicted that 2010 will show gross lending figures in the region of just £140bn…

With this in mind, mortgage lending in May saw a reduction in the number of First Time Buyers. Figures from the Council of Mortgage Lenders advised that First Timers accounted for 35% of house purchasers in May, down from 39% in March and 38% in April. Although many lenders are targeting First Times Buyers, the actual reality of them obtaining a mortgage is still problematic and depends heavily upon the amount of deposit, the interest rate and affordability, all of which can be potential issues.

In addition, according to Marketguard, if and when the Bank of England base rate starts to increase, some 7% of mortgage holders are already saying that won’t be able to meet their required mortgage repayments. If correct, this is a frightening statistic!

The Chancellor has a huge task ahead of him trying to reverse the UK’s ever increasing financial deficit whilst at the same time keeping consumer confidence high and ensuring the Banks and Financial Institutions continue to increase their lending. With such an inherited nightmare, personally, I think he has more chance of winning the lottery!

11 June 2010

Signs that the market is still not fully on the road to recovery have been reaffirmed this week as both Northern Rock and NatWest Intermediary Solutions reported that circa 600 jobs are to go. The cut backs are further proof that although positive signs have been outweighing the negatives recently, we cannot overlook the underlying financial instability issues endemic within the financial industry. And, of course, we all wait with baited breath to see what impact the forthcoming emergency budget will bring. The coalition government have been left with a huge debt/financial crisis to pick the bones out of and it appears to be much worse than we all imagined. No doubt we will get to know the full picture on the 22nd June.

In the meantime, we have been receiving a higher volume of mortgage applications for purchase transactions from across the country. The removal of HIPS does appear to have had some impact. Those looking to sell seem to be more active and yet there are some great deals to be had for purchasers whilst house prices remain relatively low in some areas.

However, with this in mind, market activity is predicted to lull during the World Cup and just as the market is showing signs of momentum. This is something we could do with out in the current climate. Obviously, I hope England win the tournament, but it would be nice if the housing market rides on the wave of success too! That said, pundits are predicting an increase in activity of up to 8% after the World Cup has finished.

Finally, as market activity has been buoyant over the last few weeks, so has the underhand tactics of some of the corporate Estate Agency chains in the area. We hear first hand from customers who have been ‘told’ to use to the internal Mortgage Adviser (who may not offer whole of market products) or their mortgage offer will not be put forward to the vendors. This is a clear breach of the Code of Practice for Residential Estate Agents. To review all the Rules and Code of Practice, visit www.naea.co.uk . They are an interesting read and certainly something you should review before entering the house buying process so you know your rights.

04 June 2010

During the last few weeks, we’ve noticed a marked increase in customers approaching us having been offered a discount on their mortgage by their current lender to move to an alternative lender. The customers current lender may be one that has closed their doors to new business and which is looking to re-capitalise to bring funds back in-house. We have seen some mortgage customers who have been offered discounts of up to 30%! This is great for the customer, especially if they have had clean credit and have maintained repayments on all of their financial liabilities for more than twelve months. It is definitely worth exploring this route if the lender you currently hold your mortgage with is no longer actively trading. Up to 30% off your current mortgage amount could be very beneficial in the current financially strained climate.

Even if you have had financial issues, there are lenders who will look at your purchase or remortgage requests. One in particular, only directly accessible through a few mortgage distributors such as AToM, is ‘igroup’. A company owned and funded by the American giant GE. igroup recently re-launched their product proposition to the mortgage market for those who are employed. They are offering mortgages up to 75% of the property value for both first time buyers and home owners. Some of their products will allow for credit issues which happened more than 24 months ago, including CCJs and Defaults. Some of their products will allow for more recent issues and as a result, they reduce their offerings to 70% of the property value. However, with only a few lenders currently in this are of the market, they are one of the most proactive with rates starting from as little as 3.49% (APR of 5.1%) variable. They also have two and three year fixed rates available. Conditions apply.

There are other lenders who are active in this arena so, whatever your circumstances, do come in and see us, or call the number above for a free confidential conversation and see what options are available to you.

28 May 2010

The sun’s been shining, two new lenders have opened for business, many interest rates have been reduced and Home Information Packs (HIPS) have been suspended! What a super week it’s been!

Aldermore have entered both the residential and buy to let mortgage markets. They are offering mortgages up to 80% loan to value on residential mortgages but, unlike most lenders these days, they will not credit score. Buy to Let mortgages will be offered at 75% of the property value and the lenders main target will be experienced landlords.

Precise Mortgages also launched into the Buy to Let market targeting high quality loans for prime customers up to 75% of the property value.

Both lenders are a welcome addition to an under funded market and in the Buy to Let sector, in particular, supports my previous articles advising that this area appears to becoming buoyant once again (although this may change if there are any dramatic changes to Capital Gains Tax in the forthcoming emergency budget).

A number of residential lenders have lowered rates during the last few days. There are some attractive long term fixed rates available, specifically over a five year term. If your mortgage is due for renewal in coming months, it’s worth exploring now to ensure you do not miss some fantastic opportunities. That said, no one can accurately predict what will happen with mortgage rates in the short term. However, most seem to agree that rates will go up, it’s just a case of when.

Finally, if you are contemplating selling your home, this has recently become cheaper following the suspension of Home Information Packs (HIP’s). On the 20th May, an order suspending HIP’s in England and Wales was imposed with immediate effect, pending primary legislation for a permanent abolition. Sellers will still be required to commission, but won’t need to have received, an Energy Performance Certificate (EPC) before marketing their property. Let’s hope this news will stimulate the market for those who were reluctant to sell due to cost, time and effort in getting a HIP arranged. Although this is great news, spare a thought for the large number of people in the HIP sector who may now lose their jobs and, of course, those poor soles who paid for their HIP on the day of the suspension announcement....let’s hope they get their money back!

27 May 2010

21/5/10 - Is the Buy to Let market seeing a resurgence? The Mortgage Works (the specialist lender arm of Nationwide) increased the amount they would lend against the value of a property to 80%. As First Time Buyers struggle to raise deposits to climb onto the property ladder and some turn to, or continue to rent, the Buy to Let market is buoyant. Such increases to the loan to value levels are a huge step forward and demonstrate that lenders have confidence in this area of the mortgage market. Although TMW are the only lender offering 80% currently, it is anticipated that other lenders will soon follow suit. This can only be good for both prospective and current landlords as competition returns to the market.

Purchasing a property for investment purposes, with property prices relatively low, is quickly becoming an alternative source to traditional long term investment vehicles. Obviously, tax implications should be reviewed with a professional adviser, but with some payment terms ranging from 5 to 40 years, and interest rates competitive, this is an option well worth investigating in some detail.

Buy to Let properties will often provide a modest monthly return over and above the mortgage payment. The additional amount can be used to supplement income, or, with flexible mortgages, can be used to “overpay” the mortgage and reduce the term.Most lenders in this sector will require the rental income to exceed the mortgage payment by up to 25% and, after costs such as managing agents this should leave some spare cash to cover repairs, maintenance and landlords insurance. It should also enable a fund to be established to cover the mortgage payment in the event that there is no tenant in situ for a while. Remember that the mortgage still has to be paid!

Generally, Buy to Let should be considered as a long term investment. That said, it is a popular sector of the market and can provide a source of income (after expenses) and capital appreciation over time. Remember though that the value of property can fall as well as rise and you will need to take this into account in your planning.

04 May 2010

30/4/10 - Mortgage and financial markets are rife with news. Here is a quick review of those items which might be of interest: Some 34,905 mortgages were approved in April, a slight increase on the March 33,360 figure according to the latest figures from the British Bankers Association. It suggests that the effect of the year-end change to Stamp Duty has now worked through, so although numbers appear subdued compared to the latter months of last year, house purchase approvals were 20% higher than in March last year.The Financial Services Authority has found weaknesses in five banks over their handling of customer complaints and has referred two of the banks to enforcement for further investigation. The review looked at several banking groups responsible for over 70% of the complaints firms received and reported to the FSA and over 60% of those resolved by the Financial Ombudsman Service. Incidentally, the Daily Mail recently reported that one lender received over 1600 complaints every day between July and December last year! Almost two-thirds of borrowers on tracker rate mortgages have failed to take advantage of low interest rates to overpay their mortgages, says unbiased.co.uk. Their research shows that 63% of borrowers have not overpaid even though charging rates are usually much lower than historically. The previous figure was 53% of borrowers in May 2009. Only 11% indicated that they were making occasional payments on top of current monthly payments.Finally, Investec Specialist Private Bank says that increased lending restrictions from banks and building societies has resulted in a growing number of high net worth individuals finding it difficult to secure mortgages of £1m or more. It says many of these people are successful entrepreneurs who are being refused credit because their finances and wealth are not straightforward, and often other lenders are bound by rigid lending criteria which do not accommodate this. This is exactly the type of customer that can be helped by the smaller, specialist lenders who are not necessarily household names. Some private banks are really keen on this type of borrower as long as they can prove affordability beyond doubt. It is worth checking with your local and independent mortgage brokerage as they will have access to such institutions.

24 April 2010

Homeowners rate buying a house more stressful than having a child. House buying tops the table of most ‘stressful life experiences’ with one in four (24%) homeowners finding it the most demanding and worrying thing they have done, according to research from Unbiased.co.uk

It is still First Time Buyers who are particularly hard hit needing a substantial deposit merely to get on the housing ladder and a significantly larger deposit to access the best rates.

According to creditaction, the typical first time buyer deposit in January was 25% (£38,348), with the average first time buyer loan being £115,044 and at an average of 3.08 times their income.

The reality continues with a YouGov survey revealing that 86% of 18-30 years olds could not currently afford to buy a home if they wanted to, despite recent falls in house prices. A massive 83% of 18-30 year olds also thought buying a new home was now more a pipe dream than a reality.

It shouldn’t be so. We have witnessed the suspension of Stamp Duty below £250k, lower property prices, more lenders looking to assist First Time Buyers with higher loan to value mortgages and other options, including Guarantor mortgages and Shared Ownership schemes. You really need to research and explore all the options available to make that important first step on to the property ladder a reality.

Meanwhile, house prices increased by 1.1% in March, partly offsetting February’s 1.6%fall, according to the latest Halifax House Price Index. This rise was the eighth rise in the past nine months. The average price is now £168,521, 9.1% above last Aprils low point.

House price confidence appears to be on the increase; if only the mortgage financing available could support such levels of optimism.

Let’s not be despondent though at the continuing tough market. Tesco Bank has confirmed plans to launch a mortgage range by the end of 2010 as it looks to build the brand into a fully-fledged retail bank. So whilst picking up your cornflakes, butter, bananas and sausages, you can also throw a mortgage in to your basket. I wonder if it will have a barcode so you can scan it in at the self-service check out?

16 April 2010

There’s a new sound certain to gather volume in coming weeks and rapidly overtaking the wailings of politicians on the hustings! It’s the plaintiff sound of heads banging against a wall in frustration! These are the daily trials and tribulations of mortgage intermediaries dealing with some major mortgage lenders in the current climate.

As staff reductions and consolidations continue, mostly below the radar of national press, teams of underwriters, who brokers have established solid relationships, are being replaced by telephone ‘no can do’ teams and who, in most cases, to put it bluntly, are not helpful in the slightest. In fact, one of my colleagues has chased a lender for a response on an application for the last four days being constantly told “we are within our 48 hour service standards.” Perhaps they mean 48 working hours, so nearly seven business days? Some lenders have recently confirmed backlogs are in excess of ten days!

If, for whatever reason, a lenders underwriter decides to request one further bit of information, or needs additional clarification, then the fun begins. It is really frustrating to learn that some underwriters are not allowed to call and establish an answer which might take 30 seconds to resolve. Instead, we receive an automated email detailing requirements and once we’ve provided the information, we re-enter the ‘48 hour’ service standard queue and the cycle begins all over again. Assuming of course that the information returned does not get lost and is directed to the right department!

Whinge over! It could have been much worse (really!) but here I am, hanging on to the phone (20 mins so far) waiting for someone to talk to me. But, they keep saying that I am really important to them, so I will hang on for just a little while longer…!

What this all demonstrates is the value of dealing with a specialist mortgage intermediary as we will take this painful flack on your behalf. Imagine you are dealing with the lender direct and this happens to you! There really is no better time to utilise the expertise and staffing levels we can provide for you. Let us take the strain on your behalf to push the mortgage through to an early completion.

12 April 2010

So now it’s confirmed. The election will be on 6th May. I will step back from commenting on political issues. There will be enough elsewhere! So, this week I thought I would review home building and contents insurance.

Buildings insurance is compulsory wherever a mortgage is in place. Whilst contents insurance is optional, it is often packaged together with buildings insurance, generally representing better value for the homeowner and value is more important than ever. According to the AA’s benchmark BIP index, quoted premiums in this area have risen for eight successive quarters.

So, why the rise in buildings insurance when house prices have been depressed? Claims experience affects pricing. The harsh winter and last year’s floods has led to an upsurge in claims for buildings damaged by snow, ice and water. The cost of rebuilding and repairing homes to the higher standards required by building regulations has been steadily rising – and it’s the cost of rebuild, not market value, that dictates the sum insured - and the most that an insurer is likely to pay out.

The homeowner has responsibility of ensuring that the sum insured is right. There is a real danger of both over and under-insurance as most homeowners don’t know the full rebuilding cost of their property. A lenders mortgage valuation will provide an estimated rebuild cost, but you should always consider a second opinion.

When it comes to contents insurance there is a persistent issue with under-insurance. Few consumers really know what it would cost to replace all of their household goods, and very few have a full inventory of their possessions. It is worthwhile systematically visiting every room – remember the garage and loft - and listing everything. People naturally think of the bigger ticket items, like furniture, TV and jewelry, but it’s amazing how many forget to include other pricey items like clothes and tools.

When assessing, it is important to identify the valuable items. Most insurers include a reasonable limit for unspecified high risk and valuable items, but do check that it will be adequate and that the single item limits are appropriate. If in doubt, speak to your local independent and whole of market mortgage and insurance provider.

02 April 2010

First time buyers are still struggling to get on to the property ladder. So, this week, I thought I would evaluate an option available to first time buyers in the form of guarantor mortgages.

Some lenders will allow a family member to act as a guarantor. Usually, the guarantor will need to prove they can afford their own residential mortgage and also the proposed mortgage they wish to guarantee. For example, if their mortgage was £100k and the proposed mortgage was £100k, the lender would look to ensure the guarantor could afford the total £200k loan. So, based on standard income multiples of, say, 4 x income, the guarantor would need to prove income of £50k. There are many ways of calculating affordability and every mortgage case is different. Lenders income multiples vary. Some assume the guarantor has no other loans. Some lenders offer a limited liability guarantee, so guaranteeing a smaller proportion of the loan. Although a guarantor mortgage is traditionally associated with first time buyers, there are products in the market that cater for those looking to move home or re-mortgage. You will probably need a minimum deposit of 15%.

The Post Office has confirmed that they will shortly be lending 90% mortgages aimed at first time buyers. At the moment it has not given any more details about the product, but says it wants to target those on low incomes. Let’s evaluate. I’ll make assumptions that they mean £20k (and below) and four times income, so £80k. Add in a 10% deposit (plus solicitors and valuation fees) and you are looking at a purchase price in the region of just £90k! This move was announced by a Government spokesman so the cynic in me asks if the headline was designed to win votes? Rates are likely to be quite high and, interestingly, the funding line is from Bank of Ireland.

Nationwide have confirmed that house prices rose by 0.7% in March, compared to a 0.8% drop in February. Prices sit 9% higher than a year ago, say the lender.

Finally, the WSCT Business Awards 2010 voting deadline is drawing close (9/4/10). If you have not voted yet, please take 2 minutes to do so. Local companies have had a rough ride over the last few months and need your support and your votes! Have a great Easter!

26 March 2010

The Chancellor had every opportunity to win votes and give the housing market the important boost it needed in this weeks pre-election budget. Did he? That’s for you to decide.

The budget has helped first time buyers with the abolishment of Stamp Duty on all properties under £250k to the end of 2011. Great news for those looking to join the property ladder, but raises confusion within the mortgage market. What is a first time buyer? Most lenders class a first time buyer as someone who has not had a mortgage for, say, one to three years. Under the new offering will these purchasers be counted out? There is a need to define who will and who won’t still fall foul of stamp duty (unclear at the time of writing this article). Watch this space!

Whatever the ruling, it is a welcome boost to the market. That said, he giveth, and he taketh away! Those purchasing above £1m will now ‘enjoy’ a 1% increase in stamp duty which will be 5% from April 2011.

There is still a lack of property for sale in the market and where are the incentives for those who want to sell and trade up? Let’s be realistic……in the West Sussex area, the gap from a two bed to a three bed property is quite substantial and sits right around this threshold. So if the latter are to sell (at say £225k) and have to pay 3% stamp duty on their new purchase (say £260k) in addition to estate agency fees and the cost of a HIP, whilst their purchasers pay minimal fees, could this deter home movers? Is this a ploy?

A fundamental budget flaw seems to be the continued reliance on the housing sector to drive the economy forward. Whilst banks continue to lend at the bare minimum (their clever advertising paints a different picture) and with few really attractive first time buyer mortgage packages, there were other areas Mr Darling might have looked at to stimulate the market. The stamp duty ‘nudge’ is a sop to catch votes and needs to recognised as such.

19 March 2010

Lenders are returning to the market! Hooray! Importantly, they are also providing exclusive products again. AToM has an exclusive 2 year fixed product at 3.35% (5.2%APR) up to 75% of the value of the property for both purchase and remortgage. We have £5m to allocate, so if this is of interest, please contact us for terms and conditions. Move quickly as £5m will not last long!

A new lender entered the market last week. Drawbridge Financial have a real appetite to lend and will look at applications on a case by case basis. They specialise in HMO’s (houses of multiple occupation such as student lets), refurbishment loans, short term bridging finance, commercial finance and more. With loans from £50k up to £15m available, this is an attractive portfolio.

The Building Societies Association has reported that only 49% of consumers think now is a good time to buy a property. The barrier seems to be the lack of mortgage finance. With funds easing, I would argue that it is a good time to get onto the housing ladder. What we can be sure of is that house prices are currently low in most areas. Mortgage interest rates are low currently but are likely to rise towards the end of this year and, probably, throughout next year too. So, to purchase a property when prices and rates are on the low side looks like a good prospect.

Meanwhile, credit scoring is creating havoc for mortgage applications to high street lenders. Most lenders credit score applications based upon the amount of credit you have, whether you are on the electoral role and your recent payment profile. If the computer says ‘no’, you will tend to find all high street lenders doors shut to you. Fear not, if your credit history is clean, if you want a loan to value of 75% or less and you can prove income, there are lenders who do not credit score, but will manually review and underwrite clean and affordable applications on an individual basis. AToM has access to six of these lenders so don’t despair if the high street lenders say ‘no’, if you fit the above profile, give us a call to see if we can assist.

12 March 2010

Mystique surrounds mortgage and property valuations, so, firstly, here is a brief overview on the options…….

Lenders require a valuation to be carried out, by their approved valuers, on every mortgage. This report is for the lender only and should not be relied upon when purchasing a property, as it does not go far enough. It only responds to the questions lenders ask relating to the property being suitable security for mortgage purposes. They have no obligation to tell you what is in the report, or give you a copy! Therefore you should always consider the benefit of an independent survey on the property you are purchasing to ensure all defects are noted before signing contracts. There are two main types of survey available, aside from the mortgage valuation.

A Building Survey – an in-depth survey for all properties built pre-1900: listed buildings: buildings that have had extensive alterations, or of an unusual construction. The surveyor will examine all accessible parts of the property and advise on technical information: the condition relative to age: further special investigations required, and provide extensive information on major or minor defects.

Homebuyer Report - a standard format set out by RICS (Royal Institution of Chartered Surveyors). This will not focus on every aspect of the property as will a building survey, but will advise on urgent matters needing attention. It may advise if items might have an adverse affect on the value of the property.

Both will comment on whether the agreed asking price is reasonable and whether it reflects the condition of the property. AToM can recommend local providers for either service.

Lender news includes: Northern Rock’s posting losses of £257m for 2009, a vast improvement from the £1.4bn losses for 2008.

‘Abbey for Intermediaries’ have reduced rates by up to 0.4% on four year fixed products and now have some very attractive offerings. These are only available through intermediaries, so talk to your local independent mortgage advisers!

Finally, Microbiz takes place at the Drill Hall, Denne Road tomorrow (13th) and is a must for any small business or start up. A treasure-trove of information and it’s free! AToM will be there. Come and see us.

05 March 2010

AToM attended the Mortgage Strategy annual awards ceremony at the Grosvenor House Hotel in Park Lane last week. These awards are the ‘Oscars’ of the mortgage world and an opportunity for those who have managed to survive the incredibly tough climate in the mortgage market, to meet and be recognised. I was aware that AToM had been short-listed but was pleasantly shocked to hear the host, Alun Cochrane (8 out of 10 Cats) announce to the 650 attendees, that the award for “Best Specialist Distributor 2010” goes to…….. AToM! Wow! Two major industry awards in the same week with the latter being the big one! Superb news and really well deserved by all the team at AToM.

Coming back down to earth with a bump, other news this week reveals lenders look like they are starting to enter into price wars. BMSolutions (part of Lloyds Banking Group) recently reduced their Buy to Let rates and, only a few days later, The Mortgage Works (Nationwide) also reduced theirs. These two lenders probably write the majority of Buy to Let mortgages currently and, with both owned by larger organisations, this shows that their appetite in the investment property arena is warming up. Without doubt, there is a huge rental market out there and this is enhanced as more first time buyers struggle to raise deposits to purchase their first properties. With no other options, renting becomes their priority whilst trying to save deposits.

With this in mind, the Council of Mortgage Lenders this week released a report indicating that 80% of all under 30 year olds now need financial help from parents or relatives to make that first step on to the property ladder. With today’s first time buyer needing around £34k deposit, which also tends to be the average annual household income, there seems to be no end in sight for the first time buyer and their ambition to get onto the property market. Whilst there remains no remedy or demonstrable assistance from lenders, the Buy to Let market will continue to flourish.

26 February 2010

I am delighted to commence this week’s column with the fantastic news that AToM has received another national mortgage industry award! We have been voted the ‘Best Mortgage Packager’ by MYIntroducer.com 2010. These awards are amongst the only ones in the industry truly determined by customer votes. Most awards have a panel of judges who vet and nominate. This is our second award for 2010 already having received the ‘Treating Customers Fairly’ accolade from the Mortgage Finance Gazette. We have a super team at AToM and this award is real credit to the hard work the staff have put in during the recent tough market conditions.

As a Mortgage Packager, AToM sticks out from the crowd somewhat. A Mortgage Packager not only works with the general public, but nationally too with many Accountants, Mortgage Brokers, Independent Financial Advisers and Estate Agents. As a Mortgage Packager, with over 10,000 registered introducers on our databases, lenders use AToM to offer their mortgage products seeking quick distribution and marketing to all of the above. This often means that we see exclusive deals, new lenders and product innovations, ahead of the general marketplace. As a Mortgage Packager, we also collate information for the lenders, obtain employer or accountant references, instruct valuations, obtain mortgage offers and in some cases go right through to requesting funds and instructing completions.

Some of these lenders will work through limited distributions, enabling them to control their business volumes. In other words, it’s up to AToM to identify the cases that may, or may not, fit the lenders criteria quickly and direct them accordingly. As a result, lenders may not need to employ as many staff to man the phones or underwrite cases. Thus containing their costs. Some lenders choose to distribute through just nine sources, of which, thankfully, AToM are one. Others will use preferred Mortgage Packagers to distribute specific tranches of their products, and so on.

So in short, we are a little bit like Doctor Who’s Tardis. The AToM shop front opens onto a business which has much, much more going on behind the scenes!

19 February 2010

Numerous mortgage rate changes have occurred during the last week or so. Some up, no surprise there then, and some down. Many innovations remain in the mortgage market with lenders offering switch and fix type products enabling you to initially take a low cost Bank Base Rate tracker and, at any time during the term of the mortgage, switch to a fixed rate at no extra cost. Great products, although beware that the switch to a fixed rate will be based on the rate at the time. If tracker rates are on the increase, you can almost certainly guarantee that the fixed rates will also have risen.

One lender has recently re-launched their Buy to Let offerings for properties owned in Limited Company Names and also Houses of Multiple Occupancy (HMOs), including student lets, etc. With Buy to Let rates starting from 4.34% (tracker) and up to 70% loan to value, this is really positive news and signs that confidence in the market is on the up and lenders appetites for volume business is returning.

Further good news as the Co-operative Bank has launched a securitisation deal worth £2.5bn. The residential mortgage-backed securities (RMBS) deal is due to close at the end of February. What does this mean? In short, it's a volume of mortgages, bundled together and sold off to investors as a package. On this basis, it dilutes the downside of any one borrower defaulting. For the industry, it means that the Co-op, once this book is sold, should be able to lend a further £2.5bn in new lending. Others, including Lloyds and Nationwide, have recently completed similar transactions. If these type of deals can once again become more standard, it will be great news for the market and economy.

Microbiz, the HDC initiative for small businesses, takes place on 13th March at the Drill Hall in Denne Road. Please support this – AToM will be there!

Finally, the WSCT Business Awards are just around the corner and if you have not yet voted for your chosen company of the year, then please do (hint hint!).

12 February 2010

So! You have no credit problems: you have a good income: no debts and you are looking to buy a property or maybe remortgage. But then, your bank, with whom you’ve been a loyal customer to for many years, reports back that you have a low credit score and the computer says “no”. They will not offer you a mortgage. This is a dramatically increasing scenario. The world of credit scoring (tick box mentality) has taken over and there’s no arguing with the lender once their technology has made the decisions.

Fear not! There is light at the end of the tunnel. AToM recognised that good clients were being rejected by lenders for no apparent reason and has built up exclusive relationships with five lenders who will assess an application manually and seek to offer assistance to such customers. This is our alternative to ‘the computer says no’ and have found an avenue for the right deals working with lenders that not only manually underwrite cases, but who have an appetite to lend. We call this Complex Prime and it does not just include those turned away by their bank for low credit scores. It could be a case scenario that needs a bit of lateral ‘out of the box’ thinking by an underwriter keen to say ‘yes’. This could include cross collateral security for clients who are asset rich: a sympathetic view for those who have trouble in proving ‘real’ income: customers who need guarantors or maybe just need someone to sit down, review the whole picture and advise on the best route to take.

I have always suggested that you speak to an independent mortgage broker with access to whole of market mortgages. Banks may only advise on their product range. Estate Agents ‘in-house’ mortgage advisers may only be able to offer mortgages from a select panel of lenders. Therefore, in order to get best advice, make sure you do your homework, speak to a whole of market mortgage broker who can advise on the most appropriate mortgage in the market to meet your requirements.

05 February 2010

A customer visited AToM last week to arrange a mortgage for their new property purchase. We obtained an agreement in principle, subject to the lenders normal underwriting, and the clients left ‘very happy’ with the speed at which this agreement was obtained. However, they still had to sell their own property. Most lenders “agreements in principle” are valid for anything between 30 and 90 days. The client left the office content in the knowledge that they had a new mortgage in principle and could confirm this to the vendor’s agents. Their own property was placed on the market the same day. This is usual practice and we then awaited the clients further instruction with regards to proceeding, once sold. The following afternoon, we had a call from the customer confirming that they had received four viewings that day and had accepted an offer nearly ten thousand pounds more than the asking price! One day on sale, two offers and one accepted! Proof, locally, that the market is returning especially if the property and, more importantly, the price is right. Consumer confidence is rapidly on the increase, a lot more properties are on the market and as mentioned above, they appear to be selling!

I attended a product launch in London last week and one of the points of particular interest was the predictions on where the Bank of England Base rate will be in the next 12 to 18 months. Some large banks and building societies contributed to the predictions, including luminaries such as Goldman Sachs, HSBC and Nationwide. The general consensus was that, as we expect, BBR will rise in this time period. The lenders in-house specialists, economists and analysts have predicted that by the end of this year, the BBR will be 1-1.5% rising to around 3.5% by the middle of 2011. Interestingly, despite the same people being unable to predict (in advance) the recession or duration of the ensuing market turmoil, these predictions may just be worth taking note of and maybe a short term tracker rate is worth a look after all….

29 January 2010

Mortgages - an interesting world! Gross mortgage lending is quoted to be up 12.5% year on year. Product offerings are increasing. Moneysupermarket.com indicates 384 products are available to those looking for an 85% loan and 165 for those looking for 90%. The UK is officially ‘out’ of recession! Superb news, so perhaps confidence will start to return in the mortgage sector now? One point of concern surrounds the activities of some mortgage lenders and their reversion interest rates (rates which apply at the end of an incentive rate period). It appears that, despite mortgages being sold with a quoted interest rate ‘ceiling’ at the end of the incentive term, there may be options in the lenders small print allowing increases above this, and at no notice! One lender which appears to have made such an increase is Skipton Building Society. Their offers ‘allegedly’ quoted a ceiling of 3% above the Bank of England Base Rate. Their new SVR (from March) will be 4.95%, an increase of 1.45%. This is blamed on “exceptional market conditions”! Ouch! Skipton’s actions have suffered the wrath of the national press and now the floodgates are open for others to follow if they have similar ‘get out’ clauses in their mortgage offers. Nationwide have increased some SVRS through their specialist arms UCB Homeloans (0.30%) and The Mortgage Works (0.50%) respectively. Two smaller lenders have announced a 0.35% increase from February.What does this mean for you? Check carefully the details of your original mortgage offer. If the reversion rate is the lenders SVR, then it’s likely this will be increasing shortly. If it is a Bank Base Rate Tracker then you are likely to move onto an attractive reduced rate, at least for a while! Whichever, it is a good time to review your contract paying specific attention to the sections relating to reversion rates.The re-mortgage market is reviving and it is a good time to review the market to see what’s available to you. Lenders seem to display little or no loyalty to you, so you have no moral obligation to them. There are plenty of lenders willing to compete for your business. Call AToM for a no obligation review.

22 January 2010

A recent report from housing charity Shelter has suggested that as many as one million households are using their credit cards to meet their monthly mortgage or rental payments. This figure represents 6% of homes in the UK, with the charity adding that the problem is growing amongst the middle classes. Without doubt, this is a worrying trend as not only will you be increasing your current debt, you’ll probably be paying interest payments on both your mortgage and your credit card! Shelter have called these figures a “shocking discovery” and warned that in some cases if people were to default on their credit card payments, their homes could be repossessed. In addition to these striking revelations, Creditaction has reported that 9,300 new debt problems are reported to the Citizens Advice Bureaux and 1,000 people are seeking some formal debt rescheduling plan every day. Therefore, it is unsurprising that in the same report, it is highlighted that a property is being repossessed every 11.2 minutes throughout the UK. My advice would be not to let the situation get so bad that there is no way back. In the current climate, mortgage arrears are frowned upon as the worst possible misdemeanour. Worse than CCJs, Defaults and other missed payments on credit. Make sure you review your circumstances and take action before it happens. Once mortgage arrears, CCJs or Defaults are registered, every financial institution (including insurance & mobile phone companies) will see these when making decisions on whether or not to lend to you. At the same time, it is likely that any online internet application will fail should you have one of these issues registered against you within the last 12 to 24 months, as nearly all lenders use credit scoring and these inevitably will have a detrimental affect to you score.To continue the scare mongering, there are only three or so lenders left in the market who will assist clients with adverse credit. The best case scenario is rates around the mid 5%s for historic adverse. The worst case is rates starting from 9.90% with eight, yes eight years redemption penalties to pay if you want to leave them. Therefore, the moral of the story is a simple one. If the going is beginning to look tough, speak to AToM for assistance. Sooner, rather than later!